Chile's Imacec drops 1% in August on historic mining drop

Chile's monthly economic activity index, the Imacec, fell 1% year-on-year in August, according to the Banco Central de Chile. With this result, economic activity accumulated a 0.5% drop over the first eight months of the year. The seasonally adjusted series declined 0.7% compared with July and 2.1% across twelve months, despite August having one more working day than the same month in 2025. This contraction follows an unemployment rate of 9.6% reported for the June-August rolling quarter.

The monthly downturn was driven by the mining sector, which plunged 17.4% in annual terms and fell 10.7% in seasonally adjusted month-on-month terms, marking its lowest production level in 30 years since 1996. Santander noted that the drop follows a 10.4% monthly decline in July. Partially offsetting mining, services output expanded 0.8% and other goods rose 4.9%. The non-mining Imacec advanced 1.4% annually and grew 0.7% from the previous month, as well as 0.2% in twelve months.

Market economists lowered their full-year 2026 growth outlooks following the release, with projections ranging between 0.5% and a contraction of 0.7%. If GDP falls this year, it would be Chile's fourth annual decline since 1990, after a 6.1% slump during the Covid-19 pandemic in 2020. Priscila Robledo, chief economist at Fintual, placed her forecast at the bottom end with a 0.7% contraction, noting that third-quarter GDP is set to be negative. Felipe Alarcón, economist at Euroamerica, and Samuel Carrasco, economist at Credicorp Capital, both revised their 2026 growth forecasts to 0.0%.

Daniel Navarrete, senior economist at Bci Estudios, projected 0.2% growth for 2026, which he stated requires fourth-quarter expansion around 1.5%. Santander and OCEC-UDP each maintain a forecast of 0.5%, though Santander noted downward bias. Meanwhile, Minister Quiroz rejected stagflation concerns, projecting that the full-year drop in mining output would likely reach 7% and that temporary shocks such as winter storms will impact annual GDP by between 1 and 1.5 percentage points.